a) Field of the Invention
The present invention relates to a patronage incentive award system incorporating monetary incentive awards made to a retirement account. More specifically, the present invention relates to a patronage incentive award system in which a computerized system calculates and transfers to a customer's retirement account a monetary incentive award for each transaction conducted with the sponsor of the incentive award. The present invention also relates to a method for operating a patronage incentive award system whereby a monetary incentive award is transferred to the customer's retirement account.
b) Description of the Related Art
Patronage incentive systems have long been used to provide added impetus for customers to enter into transactions with the sponsors who employ the incentive systems. Patronage incentive systems, like all incentive systems, endeavor to stimulate a targeted subject to engage in a type of behavior desired by the person employing the incentive system. In the case of patronage incentive systems, the targeted subject is a customer--either actual or potential--and the person employing the incentive system is the sponsor. The sponsor is usually a provider of goods or services who utilizes the patronage incentive system to stimulate the customer into engaging in transactions with the sponsor for those goods and services.
Patronage incentive systems, again like all incentive systems, seek to stimulate the subject to perform an act desired by the sponsor by providing the subject with the opportunity to obtain something that the subject wants to have. In other words, a patronage incentive system provides stimulus to a customer to enter into a transaction with the sponsor by giving the customer some type of an incentive award that the sponsor thinks the customer will want. Examples of incentive awards of prior art patronage incentive award systems include free merchandise, discounted prices, cash refunds or credits, and the opportunity to win prizes such as merchandise, services, or vacation trips. However, an incentive award is sometimes as simple as the opportunity to participate in a transaction with the sponsor which has features the customer may find beneficial to him.
One of the simplest forms that a patronage incentive system can take is that of the sponsor advertising to customers the possible benefits of entering into a transaction with the sponsor. Usually, the transaction is a sale of goods or services and the benefits advertised are the particular advantages of the goods or services that the sponsor would like to sell. The sponsor may also advertise the benefit of his price for the goods or services relative to the price his competitors would charge. Such advertisements are made by many means including newspapers, magazines, television, radio, billboards, mailers, and other forms of public or private communication. The amount of incentive provided by advertising is related to many factors including the benefits advertised, the persuasiveness of the sponsor's advertisements, the prominence of the advertisements, the media selected for advertisement, and the amount of money invested in the advertisements. A drawback to conventional advertising as a patronage incentive system is that the advertising must be paid for prior to any transactions realized from the advertising. Another drawback is that the advertising must be paid for whether or not the advertising produces any transactions at all.
Another type of patronage incentive system involves the sponsor issuing coupons which customers can use beneficially in a transaction with the sponsor. The coupon-based patronage incentive system often is used in conjunction with advertising. The coupons may allow the customer to pay a lower price for the good or service or to obtain additional merchandise or services. However, drawbacks of coupon-based patronage incentive systems include the fact that the management of the system requires the designing and issuance of the coupons as well as the collection, verification, redemption, handling, storage, and final disposal of the coupons. Another disadvantage is that redemption of the coupons at the time of the transaction can significantly prolong the time the transaction takes to occur thereby consuming valuable time of the sponsor, the customer, and other customers who are in line behind the customer who is redeeming the coupons. Another disadvantage is that the finding, cutting out, sorting, organizing, and carrying activities accompanying the redemption of coupons provide countervailing disincentives to the customer to participate in a coupon-based patronage incentive system.
Another type of patronage incentive program uses the award of merchandise selected from a catalogue as an incentive award to the customer to engage in transactions with the sponsor. In this type of patronage incentive system, the customer is awarded a number of points for a transaction. The number of points awarded may depend on the monetary value of the transaction. The number of points awarded may also depend upon the frequency of transactions the customer has with the sponsor or the time period in which the transactions are conducted. Various means have been used to keep track of and to validate the number of points accumulated by each customer. Examples of such tracking and validation means include stamps, stickers, tickets, and punch cards. However, catalogue merchandise-based patronage incentive systems have many drawbacks. Among these drawbacks are the need for the sponsor to select merchandise that will be awarded and to design, publish, and distribute catalogues. Other drawbacks include the need for the sponsor to obtain, warehouse, and distribute the incentive award merchandise, and to deal with faulty award merchandise, overstocked and understocked award merchandise conditions.
Another type of patronage incentive system involves the sponsor allowing the customer to participate in a game of chance to which the sponsor supplies the prize awards. Drawbacks of this type of incentive system include the need for the sponsor to design the rules of the games in accordance with applicable legal restrictions and to design, publish, and distribute the playing pieces of the game to the customers. Another drawback is that the sponsor must select the incentive award prizes and figure out a convenient way to award the incentive award prizes to the winners. Another further drawback is that the awarding of prizes may be required regardless of whether any transactions were made with the customer and regardless of the value of transactions that were in fact made. Other disadvantages include problems associated with the validation of winning game pieces, disputes over eligibility and winning, and problems related to the presentation of the incentive awards such as unavailability of or damage to the prizes before presentation occurs.
Still another type of patronage incentive system involves the sponsor awarding a credit to the customer that may be used by the customer toward later transactions with the sponsor. The amount of the credit awarded may depend on the monetary value of the transaction, the frequency of transactions, or other transactional characteristics such as the specific goods or services involved in the transaction. This type of patronage incentive system has the drawback that the customer is restricted to redeeming the credit award only as part of a transaction with that particular sponsor, thereby reducing the attractiveness of the incentive award to the customer.
In another type of patronage incentive system, the sponsor awards a flat cash payment to the customer when the customer attains certain goal that is related to transactions the customer has with the sponsor. A drawback to this type of patronage incentive system is that the cash award may be quickly spent leaving nothing to remind the customer of the incentive award or of the sponsor.
Some patronage incentive systems use trips to vacation spots as incentive awards. There are drawbacks to the use of vacation trips as incentive awards. One drawback is that the cost of vacation awards usually preclude the possibility of making such an award to each customer for each transaction with the sponsor. Another problem is the difficulty in selecting the location, duration, means of travel, and accommodations for the vacation trip.
From the above examples it is apparent that prior art patronage incentive systems tend to focus on providing a short term benefit to the customer as an incentive for the customer to patronize the sponsor of the patronage incentive system. However, customers also have long term needs. The fulfilment of a long term need, like the fulfilment of any need, can act as an incentive to encourage a customer to patronize a sponsor. One such long term need is the need the customer has to provide for his retirement security. Increased life expectancies along with predictions of the insolvency of the Social Security system in the near future have heightened the awareness in many people about the need to accumulate funds for their retirement years. Prior art patronage incentive systems have not utilized as an incentive the fulfilment of customers' long term need to provide for their retirement security. Thus, it is clear that what is lacking in the art is a patronage incentive system which, while overcoming many of the drawbacks of prior art patronage incentive systems, utilizes the fulfilment of a customer's long term need of providing for his retirement security as an incentive for the patronage of a sponsor.